AINS 101 ACTUAL TEST PAPER QUESTIONS
AND ANSWERS VERIFIED REVIEW
●● A liability loss has the following damages:
Medical expenses:$10,000Damages for disfigurement:$50,000Damages
for pain and suffering:$100,000
What is the amount of special damages?
Answer: $ 10,000 - Special = Medical
●● Oscar's custom-built vehicle looks like a sausage sandwich on
wheels. He plans to drive it to special events at schools around the
country where it will serve as a mobile billboard to promote his product.
Oscar is surprised to learn that insurers are reluctant to insure his vehicle
because it fails to meet one of the ideal characteristics of an insurable
risk. Which characteristic is Oscar's vehicle least likely to meet?
Answer: Large number of similar exposure units
●● The financial report for Hometown Insurer contains the following
information:
Earned premiums$4,000,000
Written premiums$5,000,000
Net investment income$1,000,000
Incurred losses$3,000,000
, Incurred underwriting expenses$2,000,000
What is Hometown Insurer's loss ratio?
Answer: 75%
●● Sota's Superstore has recently become an insured of Keithly
Insurance Company. Kaito, Keithly's premium auditor, is being sent to
conduct an advance audit. Which one of the following tasks will Kaito
do to assist underwriting?
Answer: Classify the various exposures
●● At Greenfield Insurance Company, Bernadette and Rachel are
corporate underwriters, and Tomas and Jose are field underwriters. All of
the following are underwriting activities typically performed by
corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT:
Answer: Support producers and insureds
●● John's two-year-old bicycle was stolen. The bicycle's purchase price
was $700, its current replacement cost is $800, and depreciation was
estimated at $450. What was the bicycle's actual cash value?
Answer: 350
●● Rachel is considering investing in the stock of an insurance
company. Which one of the following is likely to provide the best
indication of the insurer's financial position at this point in time?
Answer: Balance Sheet
AND ANSWERS VERIFIED REVIEW
●● A liability loss has the following damages:
Medical expenses:$10,000Damages for disfigurement:$50,000Damages
for pain and suffering:$100,000
What is the amount of special damages?
Answer: $ 10,000 - Special = Medical
●● Oscar's custom-built vehicle looks like a sausage sandwich on
wheels. He plans to drive it to special events at schools around the
country where it will serve as a mobile billboard to promote his product.
Oscar is surprised to learn that insurers are reluctant to insure his vehicle
because it fails to meet one of the ideal characteristics of an insurable
risk. Which characteristic is Oscar's vehicle least likely to meet?
Answer: Large number of similar exposure units
●● The financial report for Hometown Insurer contains the following
information:
Earned premiums$4,000,000
Written premiums$5,000,000
Net investment income$1,000,000
Incurred losses$3,000,000
, Incurred underwriting expenses$2,000,000
What is Hometown Insurer's loss ratio?
Answer: 75%
●● Sota's Superstore has recently become an insured of Keithly
Insurance Company. Kaito, Keithly's premium auditor, is being sent to
conduct an advance audit. Which one of the following tasks will Kaito
do to assist underwriting?
Answer: Classify the various exposures
●● At Greenfield Insurance Company, Bernadette and Rachel are
corporate underwriters, and Tomas and Jose are field underwriters. All of
the following are underwriting activities typically performed by
corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT:
Answer: Support producers and insureds
●● John's two-year-old bicycle was stolen. The bicycle's purchase price
was $700, its current replacement cost is $800, and depreciation was
estimated at $450. What was the bicycle's actual cash value?
Answer: 350
●● Rachel is considering investing in the stock of an insurance
company. Which one of the following is likely to provide the best
indication of the insurer's financial position at this point in time?
Answer: Balance Sheet
